Macroeconomics Quote of the Day

From Mario Rizzo, who’s written a number of great posts on contemporary macroeconomic thought:

The truth is that pre-Keynesian economics was, in most ways, more sophisticated than the aggregate demand framework bequeathed to us by Keynes and his official interpreters.

Mario explains how Paul Krugman, like Keynes himself, puts forth a straw-man version of pre-Keynesian macroeconomics in which a) crises are impossible and b) only national aggregates matter. Actual pre-Keynesian macroeconomics, like today’s Austrianism, often focused on the composition of output and employment across firms, industries, and sectors. Only a few oddballs, like Foster and Catchings, the proto-Keynesian underconsumptionist theorists skewered by Hayek in “The Paradox of Savings,” worried about economy-wide underconsumption.

A thousand years ago, when mastodons roamed eating dinosaurs, Michael J. Hoy, the founder of Loompanics Sellers of Unusual Books, now defunct, said to me that in a rational world of minimal (if any) government, what we now call economics would be a branch of accounting, perhaps being “theoretical accounting.”

Over the centuries, as I returned to college and university and had undergrad and graduate classes in economics, his words echoed.

My hobby is numismatics. Not much of a collector, my passion is for the history of trade and commerce of which stock certificates and coins are among the many artifacts. The creation of Conder Tokens and the invention of double entry bookkeeping are among the many historical events that remain unperceived by, and therefore inexplicable to, the Keynesians.